India lifts ban on Pakistan investments

India has reversed its ban on foreign investment from Pakistan, in a bid to push for a peace settlement between the rivals.

The Indian commerce ministry released a statement on Wednesday, stating that “the government of India has reviewed the policy …and decided to permit a citizen of Pakistan or an entity incorporated in Pakistan to make investments in India”. However this does not include investments in defence, space, or atomic energy.

A spokesman for Pakistani foreign ministry, Moazzam Khan, has said they “welcome this decision,” and that “it will definitely benefit Pakistani investors and industrialists. We hope this decision will be fruitful for the people of both countries”.

The move was also welcomed by Pakistani businessmen, however they are more interested to see if India will lift its ban on Indian investors investing in Pakistan.

“For a better economic future in South Asia, it will be a huge step when businessmen from both the countries can freely invest in each other’s country.” said Majyd Aziz, involved in import and export of minerals.

The decision by India to accept foreign direct investment from Pakistan was made in April, when the trade ministers of both countries met in New Delhi. There were also talks on the possibility of allowing banks from both countries to open cross-border branches, and ways to ease visa curbs on business travel.

Relations between the two rivals have improved after Pakistan’s decision to grant India “Most Favoured Nation (MFN)” status by the end of the year, meaning India will be able to export 6,800 items to Pakistan compared to the current 2000.

The two countries also aim to lift bilateral trade to $6bn within three years, and are hopeful that boosting trade will help them in their peace talks.